Vasogen Inc. said on Tuesday that new data shows its heart treatment, which failed a key clinical trial earlier this year, can reduce the risk of death from some heart problems significantly, sending its shares up 20 percent.

Vasogen shares, which slipped 70 percent in one day in June following disappointing results from a trial of its Celacade treatment, were up 12 Canadian cents, or 20 percent, at 77 Canadian cents on the Toronto Stock Exchange after earlier rising as high as 85 Canadian cents

The results, presented at a major cardiology meeting in Spain over the weekend, showed there was a 31 percent reduction in risk of death or first cardiovascular hospitalization in a patient subgroup that had not progressed to more advanced stages of heart failure.

The biotech company said Celacade could go on sale in Europe in mid 2007. It said it also expects to discuss the results with U.S. and Canadian regulators.

Vasogen's Celacade treatment targets the chronic inflammation associated with cardiovascular disease.

"The news is obviously very intriguing and promising. Vasogen has had a lot past hiccups with regard to the headlines surrounding the studies," said Joseph Pantginis, an analyst at Canaccord Adams in New York.

"We do believe that our long-standing assessment that Celacade can provide significant clinical benefit to patients suffering from chronic heart failure does remain the same."

But Pantginis said the company must still overcome "a couple of hurdles" before it can persuade institutional investors that the treatment is viable.

This includes striking a European partnership agreement ahead of the 2007 target date for the treatment and receiving U.S. Food and Drug Administration feedback on the data.

"The company needs to address and overcome significant past and future hurdles as it claws its way back to the position that we perceive it should be in," Pantginis said.

The analyst maintains a "hold" rating on the shares.